The best CRM is now event driven, not calendar driven
Rapidly emerging technology is transforming traditional CRM, which until now has been largely based on calendar-driven moments in time. Innovative cloud-based platforms like Plexure specialize in next generation CRM, empowering marketers to use the latest IoT technology to create unique customer experiences based on real-time events in physical spaces.
In the old days if you signed up for a loyalty program you were sent a welcome email on registration, perhaps another one on your anniversary or birthday and again in advance of your membership renewal. You probably also got emails every week or every month and these might have been personalized to you.
It was all driven from something CRM marketers refer to as a comms calendar managed within traditional CRM software, or worse, from a very large and unwieldy spreadsheet with umpteen variations and permutations.
Powering CRM with the IoT
Now CRM has evolved to be more event-driven. Real-world actions that happen across space and time trigger events that drive relevant communication targeted specifically to a single person in a single location at that specific moment.
Marketers incorporating IoT technology such as beacons, connected digital signs, kiosks, and wearables can now find new ways and new reasons to reach out to their customers in relevant ways based on previously unavailable data points.
Event driven CRM drives year on year growth
For most large retailers, CRM marketing remains very calendar-driven. It’s largely focused on loyalty points, special offers and the regular distribution of coupons via paper and mobile. Coupons have always been useful at getting people through the door but it’s hard to know if this strategy cannibalizes sales or drives incremental visits.
For a few years now Plexure has worked with a large QSR brand. The brand had a legacy mobile app that was used by millions of consumers to get coupons, and every week the app was refreshed with 15+ new offers. All customers got the same coupons on the same day and these could be used anywhere and at anytime until they were replaced by the next weekly batch. They were very popular too; during this time a high proportion of transactions at the retailer included a mobile coupon.
Then in 2014, in the face of some extraordinary headwinds the brand decided it needed a better way to communicate its core quality and value messages. The existing app was too limited in capability to do this effectively and there was concern among executives at the growing amount of discounting.
Next Generation CRM
The project involved a complete rebuild of the mobile app as well as a number of enterprise integrations for POS data and historic customer data. The new app was connected to the Plexure platform and with customers’ permission, collected data based on location, weather, WiFi and from other spatial cues such as beacons.
With the new app it became possible to target customers based on any combination of dimensions including demographic profile, purchase preference and real-time location. It is also possible to create multiple sample groups and manage control groups for the purpose of experimenting with various content types.
These experiments have formed an important part of the overall strategy and Plexure has been able to demonstrate growth in mobile sales that significantly outpaces growth in general sales.
One such experiment set out to establish which combination of content would drive the highest app usage in the first 30 days after download. It was discovered that people who received event-driven offers and reminders based on their location and other contextual cues were twice as likely to redeem at least 2 mobile offers in the first 30 days.
Whole new customer segments were created based on real-time behavior such as day-part preference and menu preference. Customers who seldom went for breakfast were offered free coffee when they were near restaurants that had a cafe. It was then possible to measure how many of those people actually purchased at breakfast, compared to a control group who were alike in every way but didn’t get that particular offer. The best performing incentives used a combination of live contextual triggers to drive up-sell and cross-sell across the app user base.
Programs of work
The most successful contextual event-driven experiments have now been turned into ongoing programs of work that drive engagement right throughout the customer life cycle. Early engagement and activation programs target customers when they first join the program. Depending on who you are, where you are and when you download the app you get a different experience.
Regular customers are being targeted with personalized offers and other content that incentivizes valuable new behavior. Using control groups it is possible to determine which content works the best. Uplift in frequency or average check compared to a control group can be used to calculate ROI that gives marketers confidence their event-driven CRM programs are delivering more than just a generic mix of offers would. This is particularly important for retail executives that need to be convinced of CRM’s value and its ability to drive incremental visits.
Retention and win-back programs reduce churn and further optimize returns from the growing user base, which has more than doubled within 18 months of launch.
Key benefits of using a next generation event-driven CRM
- Customer level data from the app now resides in the cloud alongside transaction level data from the POS enabling up to date analysis of purchase behaviour (recency, frequency and spend) at an individual customer level.
- The retailer now has the ability to track the impact of specific promotional content and determine the exact uplift in sales based on these specific promotions.
- It is now possible to target specific customers with specific offers based on live contextual data such as weather, day part and proximity to deliver the optimal content that drives maximum profit, guest count and average check.
- Visits from mobile customers are up YoY and not just because visits in general are up either. Visits from non-mobile customers have grown by much less.
- Increase in average transaction value from mobile customers is double the increase in average check of other customers. And average discount levels are being steadily reduced.
For more developments in new world of CRM and customer experience, check out spacetime marketing from Telstra.